Evercore ISI Maintains Their Hold Rating on American International Group (AIG)

By Austin Angelo

Evercore ISI analyst Thomas Gallagher maintained a Hold rating on American International Group (AIGResearch Report) on August 9 and set a price target of $53. The company’s shares closed on Friday at $56.26, close to its 52-week high of $57.59.

Gallagher said:

“We note, however, that the level of rate probably implies that 2017 and 2018 accident years may develop adversely, in our view, given such an extreme move in pricing. On the expense ratio in GI, AIG believes it can pull some levers to lower the acquisition ratio through various means such as optimizing the reinsurance structure with one example being the use of quota share where the ceding commission is netted against your acquisition ratio or by finding ways to lower premium taxes. Additionally, this and other optimization efforts will help AIG achieve an expected 5 pts of improvement in the expense ratio relative to when initiatives were started following Duperreault taking over and has currently already achieved 1.5 pts of that, implying that an additional 3.5 pts is on the come over the next several years or so.”

Gallagher has an average return of 6.4% when recommending American International Group.

According to TipRanks.com, Gallagher is ranked #1581 out of 5240 analysts.

American International Group has an analyst consensus of Strong Buy, with a price target consensus of $60.78.

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Based on American International Group’s latest earnings release for the quarter ending June 30, the company reported a quarterly revenue of $12.45 billion and net profit of $1.11 billion. In comparison, last year the company earned revenue of $11.47 billion and had a net profit of $937 million.

Based on the recent corporate insider activity of 20 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of AIG in relation to earlier this year.

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American International Group, Inc. engages in the provision of a range of property casualty insurance, life insurance, retirement products, and other financial services to commercial and individual customers. It operates through the following segments: General Insurance, Life and Retirement, Other Operations, and Legacy Portfolio.